Each week, we are sharing a financial wellness tip to help you make the connection between financial management decisions, your overall wellness, and student success. Money touches every aspect of our lives, and a lack of financial literacy can cause unnecessary stress and negatively impact one’s mental and physical health.
Monitoring a Budget: Understanding Expenses
Last week, we covered an important part of budgeting: understanding your income as a college student. This week, we are focusing on monitoring your budget and understanding your expenses.
For example, if you budgeted $200 this month for food but actually spent $250, it is important to review your spending to determine why you went over budget and how to avoid overspending in the future. Purchasing convenience goods is an easy way to hurt your budget. Convenience goods are consumer items that are widely available and purchased frequently with minimal effort. What falls into this category? Basically anything you can get in line at a grocery store/gas station or a vending machine - candy, soda (or pop), chips, gum, etc. The issue with convenience goods is that you typically pay a premium for the convenience of the good.
Although convenience goods appear to be cheap, the costs add up quickly. If you plan ahead and purchase these items during your weekly grocery trip, you could save over the semester and reduce the amount you are spending on food in your monthly budget. By reducing expenses in one category of your budget, you can free up some income to be used in other areas, such as saving, investing, recreation, or entertainment.
